Tort reform was one of President Bush's top campaign issues in 2004 -- and one that frequently received the most applause at campaign fundraisers. Karl Rove saw the power of this issue almost 20 years earlier in Texas. He grasped its significance before others did, capitalized on it in the races that he ran in the 1980s and made tort reform a propelling factor in the Republicans' ascendancy in Texas. Discussing this chapter in Rove's political career is Sam Gwynne, editor of Texas Monthly; Bill Miller, a Texas political consultant; Kim Ross, a lobbyist for the Texas Medical Association; and Tom Phillips, former chief justice of the Texas Supreme Court.

Executive editor, Texas Monthly

1988 is, in many ways, a watershed for Rove. It shows you how an issue can … help Republicans accelerate this trend towards Republicanism. And the issue was tort reform. I think that the country is about to get a big dose of this [issue], but we've been having big doses of this for a long time [in Texas] -- in fact, since Karl Rove started to run Supreme Court justices back in the late '80s. The Supreme Court basically swung 100 percent, too. Rove ran almost every single one of them.

The kind of cases that would come to the Supreme Court would be, somebody works for an oil refinery down in Corpus Christi or something, and somebody gets hurt, or let's say, claims long-term poisoning by the atmosphere -- big case like this [is] your typical tort case. So a worker for the company would be poisoned or claiming he was poisoned, and then he would sue the company. And of course, the trial lawyers, the tort lawyers, would come in behind this guy, and the corporate defense lawyers would take [on] the major oil company that was being sued. This then would go up through the various lower courts, state courts and appellate courts. And some of these cases would get to the [Texas] Supreme Court.

So let's say the Supreme Court sided with the little guy all the time, which they did in the '80s. It became, in effect, a plaintiff's court. The Supreme Court in Texas was ruling almost every time in the favor of plaintiffs. The effect of this ... is you get higher malpractice rates for doctors; insurance costs a lot more money. Some people perceive it as an ill to society to have too many verdicts in favor of plaintiffs. If a woman gets scalded by McDonald's coffee, maybe she shouldn't get a $5 million award. This is the realm that we're in now.

So Karl comes in and says, "You know, we're going to run [with] tort reform. And he does for a whole decade.

How does he come up with this idea?

He wasn't the first one to think about it, but he understood what it was, and he understood how it could be used. He began deliberately to work for candidates for whom that issue was important. I think one of the reasons perhaps that someone in Texas would think of tort reform before someone in Iowa is because we have some of the most famous plaintiffs venues in the country here. In the Golden Triangle of Beaumont area of Texas, you have a lot of plants that made asbestos and other things or that used a lot of chemical and oil refinery. The border is perhaps the most notorious place. That's where the famous McDonald's verdict came from. Texas was a place where a smart trial lawyer could venue shop and get himself a good jury and get, you know, a $30 million verdict against a large company and win it and then take obviously half of it. This was the place where that sort of thing happened. So I think that Karl ... saw it as a coming issue, and a big one. And believe me, not everybody saw this.

The other side of it was … if you looked at the biggest givers to the Texas Democratic Party in the '80s and the '90s, you would see at the top of that list trial lawyers. So it became this giant pitched battle, because it wasn't just necessarily about the kind of verdicts and the ease with which someone might get a verdict for a plaintiff, but it was also about the back end, which was the financing of the entire Democratic Party. Karl saw it as an adversary proposition in that particular way, and he also saw, through these Supreme Court candidates, that this was the wave to ride. And he rode it.

Now, the Supreme Court candidates in the state of Texas or almost anywhere else are "down ballot," as they say in the business. We're not talking about the governorship, for example. We're talking about something that is important to a certain group of people: business interests, trial lawyers, a handful of other people. … How does he figure out that this is the vulnerable spot? Is that Rove's genius at work or what?

I think it's Rove genius at work. I think he understands the significance of the issue before most people do. Most people do not understand that it's going to be this giant, pitched battle, which it becomes in the '90s -- I mean, a real pitched battle. It's a battle for the soul of Texas politics because it's a battle for the money, the lifeline money of Democrats, which is now drying up. …

Texas political consultant

How does tort reform become an issue in a state like this? And how important was it?

Well, what happened in tort reform is that Republicans were still thwarted in winning statewide office in many ways. And there was not a breakthrough moment until 60 Minutes came to the state in '89 and did an expose, is justice for sale on the Texas Supreme Court? They had done some filming at a retreat where judges were there, and there were big trial lawyers, and it was just too friendly for words. You looked at the pictures and you think, "This really doesn't measure up."

And many of the decisions coming out of the court were angering -- and that's putting it mildly -- business interests in the state. Suddenly, you had this TV profile about the Supreme Court.

Bill Clements had won election to the governorship after being thwarted in '82, and the chief justice retired. So he appointed a fellow named Tom Phillips to become chief justice. Tom is as straight as the day is long -- nicest guy you'll ever want to meet. He had a great issue, and he had Karl Rove as his consultant and they took [on] the court. They beat the Democrats, and then the Democrats began seeing that this is going to be a hard place to live successfully.

The other members of the court left. Other appointments were made. And suddenly the court was beginning to switch to Republican. And this is down ballot, which is not normally how you win statewide races. You win at the top rather than the bottom. But because the court had tort reform and Karl, it was a great environment to elect Republicans. You could raise a huge amount of money. You had a great gut emotional issue, and you were in business.

What makes it a great gut emotional issue?

If you have tort reform, and you have a news profile that basically slams your opposition -- in this case the trial bar; it makes them look like total sellouts, buying justice, buying the result on the court -- that is something that people can feel. It's a visceral reaction. It's dishonest. And then you got the 60 Minutes label on this, and all of a sudden you've got money, you got a good candidate, you got a visceral issue. When people see it, they get emotionally tight about it.

What's your assessment of the effect, in terms of Texas politics, of those victories?

Well, I think that what happened is the trial bar became the bogeyman in state politics. Anybody who took money from trial lawyers became part of tort reform [opposition]. And so in legislative races and other races, any time the Democratic Party and the Democratic candidates took an enormous amount of money from the trial bar, then you could say, "They're in the back pocket of the trial bar." It gave you an issue going forward, and you could paint your opponent as being against tort reform and in the pocket of the trial bar. That worked as a miracle drug for politics.

In other words, if you just got some money from the trial lawyers --

Your opponent had to defend taking that money. And you know, the environment was such that defense was never credible. The more you talk about it, the deeper the hole. …

Part of the story of the Supreme Court and tort reform was that the system was awash in all kinds of funny money. … And Phillips made this promise or pledge…

He did a self-limitation on contributions. In Texas you can give as much money as you choose to in state races, and Tom Phillips was the first candidate, I believe, who sort of self-limited what he would receive. At the end of the day it didn't really affect the amount of money he raised, because he raised millions and millions of dollars. He just raised it in slightly smaller amounts than the big chunks that you see otherwise.

How smart an idea was that, at the time?

Well, it was a perfect idea for coming out of what you had seen that you're working against the trial bar, which had given enormous-sized checks. So it made him look like he was trying to clean up the system and look straight and narrow. And that was exactly the perception that people had of him. And that's exactly the way he is, really. …

Lobbyist, Texas Medical Association

…How does [Karl Rove] attach himself to this issue, or the issue attach itself to him?

He knew intuitively, as most of us would have, that you had to have, as Mark Twain says, "a devil for the crusade." And if this was the crusade in the context of a judicial race, of which no one really cares about, you had to demonize somebody and in this case it was central casting. [The Supreme Court justices] were doing it to themselves. They were writing opinions that were offensive on their face. And essentially one particular opinion stated, "I don't care what this court previously said. I don't care what the legislature said. In fact, I was in this legislature when this law was passed. It was a political compromise. I've been elected to the court, and therefore I have a mandate to change these laws because they just aren't right." And there was a level of hubris, and we had a side that allowed us to exploit that. And it just so happened, because that was that era when the trial lawyers were a very convenient device for us to use to begin to educate voters in terms of a philosophical shift.

And Karl's particular skill position, his expertise?

Communication. He has a gift for messaging, among other things, as history has shown us. But a great sense of campaigning, knowing where the votes were, knowing what messages worked with which voters. … Karl retailed it and convinced a very cynical lobby to impose self limits … on what [amount of money] they would accept, again distinguishing himself. It was a ingenious approach.

Of course the chief justice [Tom Phillips] was a very, very bright man -- but so was Karl. And [Phillips] sat us in a room and he said, "I know you all want to send me more money. I will not accept more than this," what we thought were fairly minimal amounts, knowing the other side was going to outspend us. And Rove said, "And that's the point. Their strength becomes their weakness." And I was nodding my head and thinking, "That's very smart and bold and very risky, but also arguably by far the best strategy to take if you want to take the risk." …

So what tort reform really is, is a catch phrase, an organizing principle. It's like "Right to Work…"

Yeah, it's an organizing principle to bring together swing voters and, more importantly, to consolidate business [and] professional communities together. And frankly … tort reform has a kinder, gentler face. … It's a way of softening the blunt instrument that tort reform is when you're asking to limit damages or to allow to counter sue or limit standards for expert witnesses and all the things that are the esoterica of what, essentially, is saying, "Plaintiff, you had this right, but we're taking it away because we think you've abused it." And you do it by putting a lab coat on and arguing about access to care and the cost of medical care, not whether or not Dow Chemical is going to pay this or this and punitive damages on a suit where they might or might not be guilty. …

Was tort reform a big issue in [the 1994 Texas governor's race]?

It was. Yeah, it was.

And that was Karl driving that in or that was Bush?

I think it would be indistinguishable. I mean, it was a mantra-like issue for their natural core constituencies, including doctors. And it was also something that they could run right at Ann [Richards] with, because she had tons of trial lawyer support. It was a wedge issue, but it would have been imprudent not to use it. …

How important was the success of tort reform in that first term for Bush, for Bush's re-election? …

It established his pro-business credentials in a real simple and obvious way. It was not in and of itself the one thing, but it was delivering on a promise. It was certainly consolidated business and professional support for him in ways it would make him virtually unassailable from a Democrat ever again, which was something still to consider in those days in Texas. …

Chief Justice of the Texas Supreme Court (1988-2004)

… So the plan for your campaign, what was the bottom line? One of the decisions early on was that you would only accept certain amount of donations. What did you guys sit down and decide and why?

One of the things I liked about working with Karl is, although he was not a lawyer, he instantly perceived why a race for judge needed to be entirely different than a race for any other political office. And why it would be bad for the state -- and fatal politically -- for a judicial candidate, to be taking a position on substantive policy issues that were currently being debated around the state; why judicial candidates had to be seen as, and in fact be completely in adherence with both the spirit and the law of all the ethical codes and the ethical norms that surrounded being a judge.

I think he felt the tension between judges standing for election and judges being judges in a way that most political consultants simply had no patience with. Their view was -- many of them at any rate -- go out and try to jump on some of the bandwagons of momentary public interest, whether that was English-only in the schools, or abortion, or guns, and be seen as a popular advocate for something and win a lot of votes. And the next time an election comes up, if there were other hot issues, by then you could get in front of those. Karl completely rejected that and was instrumental in seeing that the Republican Party rejected that. …

I made it clear that I was soliciting people to vote for me, not because I was a Republican, but because of the job I would do as a judge. Karl was quite good at crafting that message, and persuading other people to accept that message. I'd never run a contested race before for any office. And I was seen, I think quite rightly, as a neophyte in terms of actual experience. …

The "Clean Slate '88" vote -- how important was that? And how did that come about? Why did that group take on the important role that they did?

1988 was a very unusual year because ordinarily there were three justices on the ballot each year, on a nine-justice court, but, because of resignations, there were six races for the Supreme Court on the ballot in 1988. So it was absolutely a chance to shape the whole Texas Supreme Court. …

And so with an opportunity for six of the nine seats to be decided in one election, a lot of groups that might otherwise have just sat aside and watched … decided to get involved. And there was a coalition built -- which I'm really not aware of the details, because it was conducted separate from the campaign -- that decided to back a bipartisan slate. That was seen to be very important at the time, not only because they genuinely felt that some Republicans and some Democrats were going to be better justices, but also because the state was not a Republican state. … The heritage of the Civil War and FDR, made the Democratic Party the dominant party at the courthouse level in Texas by a huge margin, perhaps 10 to 1 [among] all elected officials in the state.

This "Clean Slate" effort tried to break through that. We tried to go out into areas of the state that had never voted for a Republican before, except perhaps for Richard Nixon or Ronald Reagan, maybe Sen. Tower, Sen. Gramm. [We] tried to go out and convince those people that it was safe to vote Republican way further down the ballot, at least in some of the races; that you couldn't look at these judge races on a partisan basis. You had to look at the individuals. The judges weren't going to behave in a party fashion. There wasn't going to be a party platform for the cases they heard.

So what was Karl Rove's involvement with that kind of an organization, and also in understanding that the vote had to be pushed out into the rural areas?

… Karl had some excellent ideas of how to take an abstract plan -- let's make a judicial race interesting to 2 million voters -- and put that into practice in a way that people will decide it was important enough to study who all these candidates were in these court races, and cast a vote not based on which party had felt which way about the Civil War, but based on right now, what was important to the people of the state of Texas.

So in 1988, [six] out of nine Supreme Court judges were replaced. … Did that sort of set the stage for a lot of other Republicans, and Republican donors to realize that this was a doable thing?

I'm sure the fact that [so many Republicans candidates won] the Supreme Court was important in building the Republican Party. For whatever reason the Republicans left very few races unopposed after that on the statewide ballot. I think [there were only] maybe five or six judicial races where there was a Democratic incumbent for the rest of the decade. At most five or six did not have an opponent. And, of course, by the end of the 1990s, Republicans were running unopposed, at least in judicial races. …

The bigger issue of tort reform, what was Karl Rove's point of view on the issue and in the support that it garnered?

Well, I think there was a widespread feeling in Texas at the time among the average citizen, as well as among other people, that the trial lawyers were too powerful within the legislature. The plaintiff's personal injury lawyers, as a small group, had wielded an inordinate amount of power in the legislature. And Texas's very lax venue laws -- those are laws that say where you can [hold a] trial -- allowed a disproportionate number of cases to be tried in areas of the state that had no real connection with the dispute, but were areas where juries were known to be liable to give a very large award if their sympathies could be properly invoked.

And that reputation was very damaging to the state of Texas in terms of discouraging businesses to locate in Texas, or expand, or discouraging professionals like doctors to locate their practice uniformly across the state rather than just in particular areas. And [many thought] it would be a good thing for Texas if the legislature would overhaul some of the tort laws, and if the judges would have somewhat more respect for the common-law precedence that had obtained in Texas for a long time, and not be quite so "activist," was the popular term in overruling those precedents. And I think Karl felt that. …

Were you surprised that Karl sort of rode this issue and pushed it and that it still is such a popular issue today, an important issue?

Well, Gov. Bush ran in 1994 against Gov. Richards on four planks, and tort reform was one of those planks, and he got what he wanted from the legislature on all four of those planks. And since then, some citizen groups have formed in Texas that have been remarkably successful in persuading legislators to adopt their suggested changes in tort law. And they've done it without going through the normal, capitol lobbyist crowd.

I think Karl has seen that, and it has been a salient issue in Texas. And so I'm not surprised that he's interested in that issue, but I don't think you can draw a direct line from Supreme Court races in 1988 to the proposals that President Bush is making before Congress now. …